Formula Systems Reports Third Quarter 2006

November 30, 2006

Herzliya, Israel – November 30, 2006 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a leading provider of information technology products, solutions and services, announced today results for the third quarter 2006.

Revenues for the third quarter of 2006 totaled $143.7million compared to $126.5 million in the third quarter of 2005. Revenues for the nine months ended September 30,2006 totaled $407.7 million compared to $381.6 million in the same period last year.

Operating income in the third quarter was $2.4 million compared to $4.6 million in the third quarter last year. Operating income for the nine months of 2006 was $5.4 million compared to $13.4 million in the first nine months of 2005.

Net loss in the third quarter totaled $988 thousand compared to $938 thousand net income in the third quarter of 2005. Net income for the period ended September 30, 2006 was $3.7 million compared to net income of $2.9 million in the same period of 2005.

In November 2006, an Extraordinary Shareholders Meeting of Formula approved the Spin-off of Formula's subsidiary Formula Vision Technologies (F.V.T) Ltd, by way of a dividend in kind. The Spin-off will take place in December 2006. Formula Vision is a managing and holding company, guiding a group of privately held IT companies with proprietary technologies and solutions targeting international markets.

Gad Goldstein, President of Formula, commented: "The Formula Vision model is based on value enhancement of the younger, smaller companies while exploring exit possibilities and with less emphasis on current performance. As a result Formula Vision financial results suffer from high volatility which in turn influenced Formula Systems financial results. Starting from the beginning of 2007 Formula Systems financial reports will include only large, operational companies that are judged mainly by business parameters such as sales turnover and operational profits. This will dramatically increase Formula's predictability and profitability. Formula's mission for 2007 will be to make sure that all its subsidiaries will contribute positively to Formula's operational profit while maintaining a higher level of transparency to Formula's shareholder community."

Click here to download Formula Groups Q3 06 Results

About Formula
Formula Systems Ltd. is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business solutions.

Statements made in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: market demand for the company’s products, dependence on strategic partners, integration of new business, successful implementation of Formula’s products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula’s Securities and Exchange Commission filings, including its most recent report on Form 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.

Statements made in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: market demand for the company's products, dependence on strategic partners, integration of new business, successful implementation of Formula's products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula's Securities and Exchange Commission filings, including its most recent report on Form 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement

Contact:

Israel:	Gad Goldstein, President, Formula Systems Ltd. +972-9-959-8800
USA:	Dennis S. Dobson, for Formula Systems Ltd. (203) 255-7902